Vectura gets $9.5 million payoff as Novartis returns US rights to VR315

The UK's Vectura Group saw its shares plummet as much as 20% (settling the day down around 18% at 52.75 pence) after it revealed that Swiss drug major Novartis' generics unit Sandoz had returned the US rights for the development and commercialization of VR315, its combination product for asthma/COPD. In Europe, there is no change to the agreement signed in April 2006, and Sandoz will continue to be fully responsible for the development, manufacture and commercialization of the product.

Although this has never been specified, VR315 is widely believed to be generic versions of GlaxoSmithKline's big selling asthma drug Advair (fluticasone and salmeterol), and its arrival on the market would have put pressure on GSK, which saw its share price rise 3.3% to £12.65 in response. Piper Jaffray analysts say Sandoz' decision to drop VR315 was likely driven by the lack of a route to get a pharmacy substitutable product approved in the US market.

Under the revised agreement, Vectura regains full rights and responsibilities for the development and commercialization of VR315 in the USA and is released from its profit share obligations. The reacquisition of full control of this important product in the USA is part of Vectura's strategy to become a cash-generative specialty pharmaceutical company, and VR315 will form the cornerstone of its nascent US operations, the UK company explains.